As many may remember, last month, the US SEC had rejected a total of 9 Bitcoin ETF proposals filed by ProShares, GraniteShares and Direxion. While these proposals were originally submitted to the government agency in January, after nearly 8 months of intense scrutiny, the SEC found the aforementioned offerings to be unsuitable for commercial listing.

It is also worth mentioning that the Bitcoin ETFs from GraniteShares were set to be listed on CBOE BZX Exchange, while those from ProShares and Direxion were to be listed on NYSE Arca Exchange.

Why did the SEC reject the ETFs?

In a statement released by the SEC, the US government body said that it had based all of its rejections on a simple fact that the firms looking to offer the Bitcoin ETFs had not done enough to prevent their “financial offerings from being manipulated”.

“The Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”

However, soon after doling out the rejections, Hester Pierce, the Commissioner of the SEC, intervened in the matter and said that her staff would “look into the issue” and “reconsider their opinion (if needed)”.

SEC Seeks Public Comments on Bitcoin ETF Proposal

Last week, the SEC released a host of amendments for the aforementioned Bitcoin ETF proposals. These changes will affect the proposals put forth by GraniteShares and ProShares— with a new deadline of October 26 seeking public inputs and comments on the Bitcoin ETF proposal also coming into immediate effect.

Following the deadline, the SEC has said that it will start reviewing the proposed rule changes, thus allowing different regulated exchange operators to list the ETF products on their trading platforms (if approved).

Final Take

In another document released by the SEC, the government agency has said that ”pending the agency’s further review, the existing order disapproving the proposed rule change will remain in effect”.

“Accordingly, IT IS ORDERED, pursuant to Commission Rule of Practice 431, that by October 26, 2018, any party or other person may file a statement in support of, or in opposition to, the action made pursuant to delegated authority.”

With that being said, it now remains to be seen what the outcome of this entire situation turns out to be.

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